CDG calls on government to scrap Special Petroleum Tax
The Coalition of Democratic Governance (CDG), a political pressure group, has called on President Akufo-Addo to urgently remove the 13 per cent Special Petroleum Tax.
According to the group, one sensitive area that induces ripple effects on the country’s economy is increases in fuel prices.
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“The spiral effect of such increases affect transport fares, prices of food, prices of basic commodities and generates high inflation; all of which negatively affects the average Ghanaian,” it stated.
In a statement signed and issued by the group’s Chief Convener, Dr E.K. Hayford, it said in 2017, fuel prices in the country hit an all-time high and has since been rising.
The group said, the “cosmetic reduction of 2 per cent of the Special Petroleum Tax (SPT), has brought no change in condition” to the citizenry.
Dr Hayford explained that government has piled 10 different taxes on petroleum products, hence resulting in undue economic hardships on the ordinary Ghanaian.
The taxes, he said, include Special Petroleum Tax of 15%, Primary Distribution margin, Unified Petroleum Pricing Fund (UPPF) margin, BOST margin of 3%, fuel marketing margin, distribution margin, dealers /retailers margin, and Road Fund levy.
“Experts and analysts argue that some of these taxes have outlived their usefulness and so must be scrapped to alleviate hardship and find solution to the desperation of our market women,” Dr Hayford said.
Below is the statement:
GHANAIANS ARE CRYING FOR THE REMOVAL OF THE 13% SPECIAL PETROLEUM TAX: WILL NANA ADDO HEAR OUR CRY?
One sensitive area that induces ripple effects on our economy is increases in fuel prices. The spiral effect of such increases, affect transport fares, prices of food, prices of basic commodities and generates high inflation; all of which negatively affects the average Ghanaian. In 2017 fuel prices in Ghana hit all time high and has since been rising. Indeed the cosmetic reduction of 2% of the Special Petroleum Tax (SPT), has brought no change in condition.
JUSTIFICATION
In order to justify our topic for this press release, it is important to argue on comparative basis. Fuel price in December 2016 was 14 GHc/gl. Fuel price now is 22 GHc/gl; an increase of 60%. Comparing our fuel price to that of other crude oil and non-crude oil producing countries, the following fuel prices (converted into Ghana cedis) are observed : Fuel price in Nigeria is 10 GHc/gl, fuel price in Benin is 17 GHc/gl , fuel price in Liberia is 17 GHc/gl, fuel price in Russia is 15 GHc/gl, fuel price in USA is 15 GHc/gl, fuel price in Dubai is 12 GHc/gl, fuel price in Egypt is 7.5 GHc/gl, fuel price in Algeria is 7.27 GHc/gl and FUEL PRICE IN “ALMIGHTY” GHANA IS 22 GHc/gl. Among the oil producing and non-oil producing countries, our price is still the highest. This clearly shows that Ghanaians are indeed suffering.
GENESIS
The genesis of the suffering is not difficult to find. Data from the National Petroleum Authority (NPA) shows that there are ten (10) different taxes, levies and margins on petroleum products. These are:
1. Special Petroleum Tax of 15%,
2. Primary Distribution margin,
3. Unified Petroleum Pricing Fund (UPPF) margin,
4. BOST margin @ 3%
5. Fuel marketing margin,
6. Distribution margin,
7. Dealers /Retailers margin,
8. Road fund levy @ 40p/l,
9. Energy Debt Recovery levy @ 41p/l,
10. Price Stabilization and Recovery levy @7.5p/l
Experts and analyst, argue that some of these taxes have outlived their usefulness and so must be scrapped to alleviate hardship and find solution to the desperation of our market women.
REMOVAL OF SPT
The Coalition of Democratic Governance (CDG) is arguing for the removal of Special Petroleum Tax of 15% because it has outlived its usefulness. The Special Petroleum Tax was introduced in 2014, at a time when the price of crude from the International market was hitting a record low of 40 dollars per barrel. The Government at that time felt the need to introduce the tax to stabilize the ex-pump price and to cushion revenue generation from the sector. Now that the price of crude has risen to 61.81 dollars per barrel, the tax has served its original purpose and has to be removed. Originally the tax was 17.5 % and was reduced to 15% and then to 13%. Now that the oil price is relatively high compared to the price in 2014, the right thing to do is to scrap the tax to alleviate the plight of the suffering masses.
The National Petroleum Agency has held its grounds and maintained that the taxes add to the high cost of fuel which directly or indirectly lead to high transport fares, high cost of spare parts, high cost of living, high commodity prices, high unemployment figures, high inflation, high depreciation of cedi, unstable prices on international market, and high poverty rate.
SUFFERING MASSES
Mr President, Ghanaians are suffering. It is important to set your priorities right, there is no point spending the taxpayers money on 2,000 Presidential staffers (instead of 690 in 2016) and 110 Ministers (Instead of 78 in 2016) when 2,000 Nurses and thousands of Teachers have no jobs and hundreds of thousands of unemployed (40% of population) Ghanaians cannot afford one good meal a day. It is not right, when Presidential budget alone, add up to 1.9 billion when the Ministry of Education with a budget of 72.8 million is struggling with payment arrears of supplies of food and logistics to the SHS. At the moment, not a single flagship program of the NPP Government is working right, says an expert. The reason is simple; bad planning and lack of coordinated policy concept.
GALAMSAY
The fight against galamsay operators which took off with much flare, has now lost momentum; and is collapsing, leaving thousands of galamsay workers, their children and wives jobless. This is because the concept policy for that project was wrong. In 2014, the late Prof Mills of blessed memory, started the first phase of his policy concept on galamsay by employing the galamsay workers in tree planting jobs on the degraded lands as the first step. After addressing the job desires of the galamsay workers, he went to the second phase which was to address the issue of the small scale miners and to amend the mining laws and regulations.
WRONG CONCEPT
Nana Addo “is not aware” of policy concept. He started by addressing the galamsay workers with an ultimatum to leave their sites. When this was not working, he followed it up with Operation Vanguard, to force maintain order. This is wrong and so cannot lead to the expected success. Mr President, listen to CDG; scrap the 13% SPT and change your governance policy to minimize the plight of the people, before you are swept out of office.
Dr E.K.Hayford
Chief Convener